CBRE’s Q2 2016 retail data for the Greater Los Angeles Market reveals that the future of retail closely aligns with the shifting demographics seen nationwide. As the middle class becomes smaller, pushing the population into the upper middle and lower income categories, the demand for retailers falls. A number of middle-tiered box tenants have exited the market due to over saturation and weak sales. Yet, discount and luxury sector tenants have continued to thrive.

This trend spans the retail sector from restaurant choices to athletic apparel and groceries. As retail traverses these growing changes, landlords and brokers will continue to target niche occupants to better outfit the needs of population incomes and demands.

Key findings also included

– Improved employment levels (4.3% unemployment rate for Q2 2016) and increased consumer spending led to a robust quarter for the Los Angeles retail market. Looking ahead, the momentum is expected to continue well into next year.

– Rents for retail space will increase by 4% by Q2 2017, while occupancy levels should decline by an additional 40 bps over the next 12 months.*